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Sunday, 18 December 2016

House of Lords Select Committee: Fisheries and Brexit

Last week the upper house met to discuss Brexit and the UK fishing industry having been presented with reports from all sectors of the industry.Here are some of the key elements of the report they were provided with - plus links to the full report at the end of the post.IntroductionFisheries and the EU referendum1.The referendum campaign raised the profile of fisheries, which was widely seen as a policy area where there was much to gain and little to lose from leaving the EU, restricting EU vessels from fishing in UK waters and leaving the regulatory regime of the Common Fisheries Policy (CFP) behind. It is not, however, clear that Brexit will be plain sailing for fisheries.2.Drawing on oral evidence from four panels of witnesses and a limited number of written submissions from academics, think tanks, industry representatives, campaign groups and Government, we seek to highlight key opportunities and risks that will arise from disentangling UK fisheries from the EU, and the options available to the Government in the Brexit negotiations. In doing so, our focus is on fish that are caught, not farmed.3.In keeping with the remit of our Committee, we focus on the UK’s future relationship with the European Union. We acknowledge that fisheries management and international fisheries relations are immensely complex policy areas that cannot be addressed in full in this report.The work of the Committees4.Following the referendum on 23 June 2016, the European Union Committee and its six sub-committees launched a coordinated series of short inquiries, addressing the most important cross-cutting issues that will arise in the course of negotiations on Brexit. The pace of events means that these inquiries will necessarily be short, with only two or three public meetings in each case, and limited amounts of written evidence. But within these constraints, we are seeking to outline the major opportunities and risks that Brexit presents to the United Kingdom.5.Our inquiries run in parallel with the work currently being undertaken across Government, where departments are engaging with stakeholders, with a view to drawing up negotiating guidelines. But while much of the Government’s work is being conducted in private, our aim is to stimulate informed debate, in the House and beyond, on the many areas of vital national interest that will be covered in the negotiations. As far as possible we aim to complete this work before March 2017.This report6.We are grateful to the witnesses who gave oral evidence and to those who responded to our targeted request for written contributions. All views expressed in this report are of course our own.Report Summary:The Common Fisheries Policy (CFP) has not always been successful in achieving its objectives of managing a mobile and renewable resource sustainably. Furthermore, the application of centrally adopted technical measures, such as gear types and net sizes, the allocations of quotas and the principle of equal access have historically led many in the industry to argue that the CFP is not only unfit for purpose, but is also unfair to the UK. Nevertheless, with UK leadership, the recent reform of the CFP towards regionalisation, maximum sustainable yield, and the banning of discards has meant considerable improvement.Withdrawing from the European Union will mean withdrawing from the CFP. But fish know nothing of political borders and most commercial fish stocks are shared between UK waters and those of other EU or European coastal states. Species of fish may spend different stages of their life cycles in different nations’ Exclusive Economic Zones (EEZs), and their spawning grounds may be in a different region from that in which they are caught when mature. These stocks are vulnerable to exploitation on either side of the political borders.The fishing industry represents a very small part of the UK’s GDP. Yet it is of great importance to many coastal communities across the UK. Successful fisheries management is also vital to the health of the wider marine environment. Withdrawing from the CFP gives the UK the opportunity to develop a fisheries management regime that is tailored to the conditions of UK waters and its fleet.Fisheries management is a devolved matter for which the CFP has provided a common framework across the Devolved Nations. Post-Brexit this framework will fall away, raising the potential of four differing UK fisheries management regimes. Yet for the purpose of Brexit negotiations the UK must act as a single coastal state. Devolved Administrations must therefore be taken into account from the outset to ensure that a unified UK negotiation position on fisheries and Brexit is formed, based on co-operation with the four Devolved nations and their fishing industries.The UK Government will be in a position to renegotiate its quota of Total Allowable Catches (TACs) for stocks that are shared with the EU and other neighbouring countries, taking account of the full lifecycle of mobile stocks. Once outside the EU, the UK can represent its own interests in vital international fisheries negotiations with neighbouring states. The Government must assess which of the many agreements upheld by the EU with key northern neighbours it wishes to replace, and establish the UK’s seat in Regional Fisheries Management Organisations.Significantly, the UK will also be able to control access by foreign vessels to UK waters, though withdrawal from the CFP will not in itself solve the issue of ‘quota hopping’. Access could be a lever for the Government when negotiating new allocations of TACs for shared stocks, bearing in mind that fish must be exploited sustainably. In keeping with its commitments under international law, the UK should continue to co-operate with its maritime neighbours on fisheries management to ensure the sustainable management of these resources on the basis of scientific advice.Fisheries also have an important trade angle. The majority of fish caught by UK fleets are exported—mostly to EU Member States. A successful catching industry therefore needs continued market access. The majority of fish consumed in the UK are imported. Continued access to free, or preferential, trade in fish and seafood will therefore be crucial for the seafood industry and UK consumers. In approaching the wider Brexit negotiations, the Government must seek to preserve the UK’s access to low-tariff exports and imports in fish.Fisheries policy is a complex area, which cannot be solved in its entirety by the Great Repeal Bill. Untangling UK fisheries from the EU will be challenging and require political will and resources, both in the wider Brexit negotiations and beyond. From the day of withdrawal from the EU the UK will need to have in place arrangements with the EU and third countries with which the EU has fisheries agreements, so that shared stocks can be managed, access arrangements for UK vessels fishing outside UK waters can be negotiated to the mutual satisfaction of the parties, and trade in fish products can continue.Many in the fishing industry were vocal in their support of Brexit and have declared the vote to leave a great opportunity for the sector. Notwithstanding the comparatively small contribution of fisheries to the UK economy, the voices of the industry, the coastal communities that support, and thrive on, the industry, and its supply chains must be heard in the wider Brexit negotiations.It is worth remembering phrase that has been around in the English language for hundreds of years - but is still highly relevant today and cuts to the heart of the matter."Tragedy of the commons"Where a resource is accessible to anyone and competitive in consumption, meaning that what is used by one person cannot be used by anyone else, it is rational for each consumer to consume as large a share of the resource as they can, without regard for the consequences of everyone acting in the same manner. This is known as ‘the tragedy of the commons’ and leads to over-exploitation.Fishing in the United Kingdom8.Though the fishing industry is modest in size, if measured in economic output—in 2014 the fishing industry employed 11,845 fishers in the UK1 and contributed some £426 million to GDP,2 or less than half a percent of UK GDP3—fisheries have a much broader cultural, social and historic value. Fisheries are also crucial to the prosperity of many coastal communities across the United Kingdom. Despite fisheries’ prominent role in the Brexit campaign, there are widespread concerns that fisheries will be pushed aside in the negotiations due to this relative economic insignificance.49.Fisheries management is a devolved matter, and the Devolved Administrations manage vastly different industries: the Scottish fishing fleet has fewer but larger vessels and lands the most fish in terms of volume as well as value,5 whereas England, Wales and Northern Ireland have more fishers and vessels.6The ‘tragedy of the commons’10.Fish are a vulnerable resource, prone to over-exploitation. They know nothing of political borders and many species move freely between national territorial waters throughout their life cycles.Box 1: Tragedy of the commonsWhere a resource is accessible to anyone and competitive in consumption, meaning that what is used by one person cannot be used by anyone else, it is rational for each consumer to consume as large a share of the resource as they can, without regard for the consequences of everyone acting in the same manner. This is known as ‘the tragedy of the commons’ and leads to over-exploitation.Source: European Union Committee, The progress of the Common Fisheries Policy (21st Report, Session 2007–08, HL Paper 146)11.In the absence of co-operative management of stocks that are shared by two or more countries, fish become vulnerable to over-exploitation, as the historic cod and mackerel ‘wars’ illustrate.7 Such over-exploitation, Dr Thomas Appleby, Associate Professor at the University of the West of England, told us, involves “stealing fish from the adjacent coastal state or the next generation.”8 He concluded that “Co-ordination and a shared approach is the only tenable way to manage the resource to avert a ‘tragedy of the commons’”. The transboundary nature of fish also led the Government’s 2014 Balance of Competences Review to conclude that the majority of respondents supported some form of supranational fisheries management.912.In our 2008 report The progress of the Common Fisheries Policy we noted that fisheries were often used to illustrate the ‘tragedy of the commons’, for good reason, in that they constitute a mobile, public and renewable natural resource, which can be accessed by many and consumed only once. We concluded that the fundamental challenge for fisheries management was to prevent this phenomenon from taking its natural course. This challenge will remain even after the UK leaves the EU.10The Common Fisheries Policy13.The United Kingdom’s approach to managing fisheries is largely determined by the European Union’s Common Fisheries Policy (CFP), which was developed during the 1970s and early 1980s.11 The objective of the CFP is to ensure that fishing is “environmentally, economically and socially sustainable”, and to harmonise competition between fishers in the EU.1214.The CFP manages fisheries in Member States through measures that control how many fish can be harvested each year (quotas), and through technical Regulations on, for instance, gear types. The CFP also provides some structural funding to fishing communities and fishers,13 regulates marketing standards for fish products and autonomous tariff quotas for fish imports.14Total Allowable Catches and quotas15.Many commercial fish species are mobile demersal species that move in and out of national waters (such as plaice, cod, sole and haddock), or migratory pelagic species (such as herring and mackerel) that migrate over large distances.15 Mobile and migratory species often have a number of stock units that equate with the management units used in European fisheries managements.16 These stocks are typically managed using catch limitations in the form of Total Allowable Catches (TACs) and quotas.Box 2: Total Allowable Catches (TACs)Total Allowable Catches (TACs) are catch limits that denote the volume of fish that may be caught, and should reflect the volume of fish that can be taken without undermining the sustainability of that stock. Not all fish are managed through TACs, though most commercial species are.In the EU, Member States collectively agree TACs for most commercial fish stocks. Every year the European Commission proposes a TAC for these commercial species for each area within the EU zone. The proposal is based on scientific advice from the independent International Council on the Exploration of the Sea (ICES) and the EU Scientific, Technical and Economic Committee for Fisheries (STECF).Scientists provide an assessment of the health and state of a given fish stock. Then, Member States agree what proportion of the stock can be exploited that year, bearing in mind that the TAC should enable fishing at a level that can produce the maximum sustainable yield (MSY) for harvested stocks by 2020.17Source: European Commission, TACs and quotas: http://ec.europa.eu/fisheries/sites/fisheries/files/docs/body/poster_tac2015_en.pdf [accessed 7 December 2016]16.Once agreed, the TACs are divided among Member States in the form of national quotas. This is done on the basis of the ‘relative stability’ allocation key, which grants EU countries a fixed percentage of quotas for each of the fish stocks in question. For example, in 2015 the UK was allocated quotas amounting to 28,576 tonnes of North Sea haddock (equal to 84% of the EU quota) and 34,066 tonnes of North Sea plaice (equal to 28% of the EU quota).18Box 3: Relative stabilityRelative stability is an allocation key used to share out fishing opportunities between Member States. It was established in 1983 on the basis of historic catches, the loss of opportunities for some Member States as a result of the general extension of 200 nautical mile limits in 1976; and the need to protect particular regions where local populations were especially reliant on the fishing industry. The relative stability share has remained constant over time.Source: HM Government, Review of the Balance of Competences between the United Kingdom and the European Union: Fisheries report, p 1417.Each Member State must allocate the quotas that it receives to fishers in its country using transparent and objective criteria. The current method of allocating quotas within the UK is thus a national competence.It has been criticised for disadvantaging smaller vessels.Box 4: Maximum Sustainable YieldMaximum Sustainable Yield (MSY) is the largest average catch (or yield) that can continuously be taken from a stock under existing environmental conditions without decreasing the stock’s ability to yield fish in future years. This is determined by calculating the population weight or biomass that is added every year, and then deducting its natural mortality.When stocks are overfished advice will be given to bring them to fishing mortality levels that correspond with MSY. This results in a reduction in catch in the short-term with the expectation that catch will increase in the longer-term.The ICES MSY approach is based on a long-term strategy whereby catch rates are fixed, enabling fish stocks to reproduce so that exploitation can occur in sustainable economic, environmental and social conditions.Source: Seafish, Industry guidance note: Maximum Sustainable Yield (MSY) (March 2011): [accessed 7 December 2016]18.For stocks that are shared22 and jointly managed with non-EU countries, the TACs are agreed with those (groups of) countries bilaterally or in coastal state negotiations, often through Regional Fisheries Management Organisations (RFMOs).23 The European Commission negotiates the TACs, the proportion of the TAC that the parties receive and mutual access to fishing in EU and third party waters on behalf of Member States.2419.In order to harmonise competition between fishers in the EU, the Exclusive Economic Zones (EEZ) of all Member States are considered one joint EU zone, also known as ‘EU waters’. The CFP regulates the fishing activities within the EU zone, though Member States have retained competence over the regulation of fishing activities in inshore waters (defined as the 0–12 nautical mile zone off the baseline of the coast). The 0–6 nautical mile limit is preserved for domestic fishing activities, whereas some Member States have historic rights to fish in the 6–12 nautical mile zone in other EU countries.25Box 5: Exclusive Economic ZoneThe state has the right to establish a territorial sea up to a limit of 12 nautical miles measured from the baseline. The EEZ is an area of sea beyond and adjacent to the territorial sea that extends up to 200 nautical miles from a country’s coast. Where the EEZs of two adjacent countries overlap, a median line is defined equidistant from the two countries’ coastlines to separate their respective EEZs. Within the EEZ a coastal state has the sovereign rights for the purpose of exploring and exploiting, conserving and managing the living natural resources.Source: United Nations, United Nations Convention on the Law of the Sea (UNCLOS), 10 December 1982: [accessed 5 December 2016]

Figure 1: Map of the UK EEZ26Map of the UK EEZBased on Joint Nature Conservation Committee, Map showing relationship between different boundaries used under national and international obligations at a UK scale (2014): http://jncc.defra.gov.uk/pdf/UK%20obligations_boundaries_UK%20scale.pdf [accessed 2 December 2016]20.Fishers registered in any Member State enjoy equal access to fishing in the 12–200 nautical miles of the EU zone.27 However, as outlined above, most commercially-fished stocks in EU waters are regulated through quotas that determine which quantities of a given fish stock a vessel may catch each year.An unpopular policy21.The CFP has historically been criticised for mismanaging stocks and incentivising overfishing.28 Barrie Deas, Chief Executive of the National Federation of Fishermen’s Organisations, said that the CFP had not “covered itself in glory over its history”,29 while Bertie Armstrong, Chief Executive of the Scottish Fishermen’s Federation, called it “unfit for purpose”.3022.Fisheries featured prominently in the Leave campaign leading up to the referendum. Many within the industry feel that, thanks to the principle of equal access, fisheries were “sold down the river” when the UK acceded to the European Economic Community.31 Fisheries has therefore been highlighted as a policy area where the UK has much to gain from leaving the EU. Fishing for Leave, a campaign group that campaigned actively for leaving the EU, told us: “It is CRITICAL that for either political convenience or a minority of industry interest that the CFP is not replicated into British law.”3223.In the years since UK accession the CFP has undergone substantial reform, not least thanks to the continued efforts of successive UK Governments.33 Key elements of the reform, some of which are still being implemented, were a stronger commitment to MSY; the introduction of a ‘landing obligation’ to eliminate discarding of fish at sea; and regionalisation of governance enabling Member States that share fisheries at a sea basin level to agree and enact regional decisions in EU or national law. Regionalised strategies for fisheries management are increasingly implemented through multi-annual plans (MAPs), which set regional targets and conservation measures for single or mixed species in areas such as the North Sea. The Government broadly supports this approach.34Brexit and the CFP24.Withdrawing from the EU will inevitably mean withdrawing from the Common Fisheries Policy.35 To many in the fishing industry Brexit is therefore a “sea of opportunities”.36 We heard that Brexit was an opportunity for the UK to adopt a new fisheries management regime, tailored to UK conditions.37 We also heard that by revoking the principles of equal access and relative stability, fishing opportunities could be increased.3825.Yet fisheries are also a highly complicated policy area, not least in the light of Brexit. The majority of legislation regulating fishing activity in what will be UK waters originates from the EU, and must either be replaced or preserved before withdrawal from the EU takes effect in order to prevent what Richard Barnes, Professor of Law at the University of Hull, referred to as a “regulatory deficit”.39 His concern was shared by the New Economics Foundation (NEF), the Institute for European Environmental Policy (IEEP) and Dr Appleby.40 Prime Minister Theresa May MP has announced that the Government will introduce a Great Repeal Bill that will carry over existing EU law into domestic law until such a point in time where it can be replaced with domestic legislation. It is possible that such a Bill could preserve many of the Regulations that manage fishing activities in what will be the UK EEZ, thereby minimising the risk of a regulatory deficit.26.However, other elements of the CFP do not lend themselves to a Great Repeal Bill approach: when the UK leaves the EU, it will no longer take part in Council negotiations or the annual setting of TACs for shared stocks. The UK will also cease to be included in the quotas and mutual access agreements the European Commission negotiates on behalf Member States with third parties. Without this framework for co-operation, stocks that are shared between the UK and the EU risk becoming over-exploited.

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